When I transfer money from my bank account to another, the money disappear immediately from my account but they appear after one or two days in the other account.
Where exactly is my money during this period? Who hosts it? Am I insured against loss? What happens if the the sender’s or the receiver’s bank bankrupts at that exact time?
In: 8
When it leaves your account it’s in the hands of the banks, either your bank, an intermediary or clearing bank, or the receivers bank. Depending on where in the world this can be for a few seconds to a few days. This is all just “on the books”, no actual physical money moves, it’s all electronic, and the banks agree their position across all transactions at the end of the day.
Insured? Depends again where in the world you are. In the European Union (EU) each country has in their law a consumer protection scheme that protects most accounts up to a certain amount (€100,000 or equivalent, £85,000 in the UK even although no longer in the EU). If a bank goes bankrupt the scheme refunds the consumers, and while it’s mandated by the government it’s funded by the banks. ([Deposit Guarantee Schemes](https://ec.europa.eu/info/business-economy-euro/banking-and-finance/financial-supervision-and-risk-management/managing-risks-banks-and-financial-institutions/deposit-guarantee-schemes_en)).
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